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MERS: The Wave of the Future

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May/June 2001 - Volumne 80, Number 3

by Dan McLaughlin

Rapid access to information is quickly changing the real estate finance industry, and MERS (Mortgage Electronic Registration Systems, Inc.) is the center of some changes. MERS, created to eliminate assignments, is reducing costs and paperwork in the mortgage banking industry. The development of MERS® Link promises to save time and paperwork for the title industry.

The new service, which queries the MERS® System for information important to title companies, is a cooperative effort between MERS, ALTA®, and EDS, our technology partner. Due to the recent rapid growth of loans registered on the MERS® System, MERS was approached by ALTA® to provide an alternative to the MERS Voice Response Unit (VRU.) The VRU provides toll-free telephone access to MERS for determining the current servicer of a loan. The VRU has proven to be reliable and is still a good solution for low volume users.

Access to the VRU hasn’t changed in four years. Title companies and consumers dial into the system via the telephone and key in a MIN (Mortgage Identification Number) or an applicable social security number to learn servicer information. Although this function works well for the general public, ALTA® wanted a more streamlined solution for title professionals. ALTA® funded the project and we worked with EDS to enable MERS® Link to interact with the MERS® System.

The browser-based MERS® Link allows settlement agents to quickly determine the correct current servicer of loans registered on the MERS® System. Users may enter the property address, borrower name, borrower social security number, or the loan’s MIN.

Because multiple servicing transfers are common during the life of a loan, opportunities for unrecorded assignments, delays in recording assignments, and even misidentified servicers exist. MERS minimizes those possibilities because it eliminates the need to record assignments when servicing rights are traded between MERS members. The identity of the new servicer is typically updated on the MERS® System within 24 hours of being notified of the transfer.

Launched in April 1997, the MERS® System is an electronic registry that tracks changes in service and beneficial ownership rights. Member companies use either MOM (MERS as the Original Mortgagee) language security instruments, or assignments into MERS and use an 18-digit MIN to track changes for the life of the loan. Today, the system tracks more than 4 million registered loans and about 9,500 loans are registered on the system daily. Loan registrations are accelerating at a rapid pace and are expected to have doubled by the end of the year.

MERS® Link wasn’t incorporated into the MERS® System originally because browser-based business processing was still in its infancy in 1997. But the convergence of two trends, the recent rapid adoption of MERS and the maturing of e-commerce over the Internet ensured that MERS Link’s time had come.

Even with MERS® Link’s improved performance and capability, MERS will continue to support the VRU. MERS is committed to providing free general access to servicer information on MERS-registered loans.

MERS® Link is a business to business application, only available to ALTA® and MERS members for a fee. The differences in MERS® Link and the VRU are in the Web’s unique capacity to format information and link to other company’s information with the click of the mouse. MERS® Link’s expanded capabilities greatly increase the amount and flow of information available to title companies.

MERS® Link is accessible from www.mersinc.org (look for the MERS® Link logo) or the ALTA® Web site (www.alta.org.) After entering the required Org ID, Username and Password, users can retrieve the borrower’s name, property address, lot, block, subdivision and parcel number if present; security instrument and assignment recording information if present; and current servicer/subservicer identification contact information.

Other features include cross-reference MIN information capabilities, links to servicer/subservicer Web sites if available and the ability to retrieve, print, store and download information on multiple MINs.

The ability to retrieve information on more than one loan at a time is a major advantage over the VRU. MERS® Link also provides file-downloading capability, and the elimination of writing down the information or having it faxed back to the requester’s office. Another major advantage is a "hot link" to servicers that maintain Web sites. This advantage depends on servicers furnishing their Web site link, which we actively encourage.

Frank Tucker, MERS account manager for EDS, and his team confronted the task of creating the search function to locate and display the MINs, social security numbers, property addresses, and the other fields MERS and ALTA® required. MERS, ALTA®, and EDS continued to work closely to ensure the final product met the title industry’s needs and could be expanded if needed.

The EDS team began development in August 2000, and had MERS® Link ready for testing in October. Melva Moore, a MERS product performance manager who played a major role during the testing phase, worked closely with ALTA®’s Kelly Throckmorton to ensure system compatibility and user friendliness. Melva coordinated MERS® Link tests using queries from ALTA® and EDS. Thanks to a clear vision, and cooperation between developer and users, the User Acceptance Testing phase went smoothly. By the end of the year, MERS® Link was ready for prime time.

Prime time came in February. Melva and Rodney Mason, from EDS, took MERS® Link on the road for a demonstration at the 2001 ALTA® Tech Forum. They demonstrated the system’s easy access via the Internet and how easily title information is retrieved.

Melva described visitor comments as both positive and encouraging. Visitors liked the added property address and borrower name search criteria. They understood the importance of a search that could connect to the servicer’s Web site. The conference attendees said the ability to retrieve information and then connect to the servicer’s Web site for additional information was another time saver and a definite improvement over the VRU. They also liked being able to see the information, then saving and printing it, which eliminated a request to fax back the information.

The future of MERS® Link may include the ability to obtain payoff information from the servicer’s Web site, which would reduce the number of payoff-related inquiries.

We have also adapted MERS® Link for county recorders who would like to deploy it in their own shops. In this configuration, MERS® Link will only retrieve servicer information specific to loans registered on MERS in that county.

We invite your suggestions for how to get the most out of MERS® Link for yourself, your company, and your industry.

Access to MERS® Link

ALTA® is proud to be a partner with MERS and EDS in the development of MERS® Link, the gateway to MERS loans online. ALTA®’s Board of Governors believes that instantaneous access to loan information via the Internet is so important to members’ businesses, that they authorized the expenditure of funds to move the infant MERS® Link project along at a faster pace than was originally scheduled. In return, ALTA® members have received an incredible savings incentive to use this new service.

At membership renewal time, ALTA® members were given the opportunity to access MERS via the Internet. At press, 660 members have signed up. Because ALTA® is a major underwriter of this service, we can offer MERS® Link to members for only $35 per log-in/password! This is one-tenth of the cost that ALTA® nonmembers pay for the same service. Additionally, for those who sign up this year, ALTA® and MERS are guaranteeing this low $35 fee for 2001 and 2002.

To qualify, membership in ALTA® must be current (paid through December 2001.) Once the $35 payment is received, you will be assigned a log-in and a password and can begin using the system. Members can sign up for more than one password if there will be multiple users.

The ALTA® MERS® Link program gotten off to an incredible start. At press time, almost 700 ALTA® member log-ins have been assigned. Additionally, many members who passed up the opportunity to sign up for MERS® Link at renewal time call ALTA® headquarters daily to take advantage of this valuable new member benefit and add MERS® Link to their ALTA® membership.

If you have not signed up for MERS, you still can, but only for a limited time, June 30, 2001 is the deadline to get the $35 rate for this year and next. After that, MERS® Link access fees will increase. Contact Elizabeth Twitchell, ALTA®’s research & membership assistant, at elizabeth_twitchell@alta.org or 1-800-787-ALTA® to sign up for this new member benefit and take advantage of the low introductory fee.

Dan McLaughlin is the executive vice president, MERS Product Division. Dan was the architect of the MERS® System and designs the business processes and procedures under which MERS operates. Dan can be reached at danm@mersinc.org or 703-761-1277.



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